Supreme Court imposes Rs 100 crore penalty on Sterlites unit

Sterlite Industries shares rose over 4 per cent on Tuesday after the Supreme Court quashed a Madras High Court order asking the company to shut its Tuticorin Smelter unit for environmental damage. However, the top court asked Sterlite Industries to pay a compensation of Rs 100 crore for polluting environment.

NDTV | Last Updated: April 02, 2013 12:58 (IST)

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The Supreme Court has imposed a fine of Rs 100 crore on Sterlite Industries for flouting green norms at its plant in Tamil Nadu, the Supreme Court ruled on Tuesday. The compensation amount has to be paid in five years, the court said.

The case is unrelated to a separate order that has shut the Tuticorin plant, India's largest, since last week following complaints of a gas leak.

Despite the fine, the Supreme Court overruled an earlier order from the Madras High Court to shut down the plant over long-standing environmental concerns, the bench headed by Judge A.K. Patnaik said.

On Monday, the company informed the stock exchanges that the Tamil Nadu Pollution Control Board had passed an order to shut its plant at Tuticorin after locals complained of breathing problems.

Shares in Sterlite Industries, a subsidiary of London listed Vedanta Resources, traded 3.5 per cent higher at Rs 92.85 as of 11.05 a.m. Sesa Goa, which is set to merge with Sterlite Industries, rose 3 per cent and was the top Nifty gainer.

The Madras High Court had ordered the closure of Sterlite's Tuticorin unit in September 2010. Subsequently, Sterlite Industries had filed a Special Leave Petition in the Supreme Court against this order.

The impending judgement has been a big overhang on Sterlite shares, but analysts are not optimistic on the counter.

"The upside is limited because copper prices have hit a seven-month low. The global scenario for metals is not looking positive," A.K.Prabhakar, senior vice president (equity research) at Anand Rathi said.

Technical analyst Kunal Saraogi said the stock has a strong resistance at 95 and is likely to be range bound between 100-90 levels.